Asian stocks were mostly higher on the final day of the year but volumes were light with markets in Japan, South Korea, Taiwan, Philippines and Thailand shut for holidays.
Investors received a mixed lead from the U.S. after a report on pending home sales came in below expectations. The Dow managed to knock out another record close while other indices closed flat.
China's debt levels are in focus after the state auditor said in a report that local governments owe nearly $3 trillion. The nation's rapid economic growth has been funded by a colossal borrowing spree in recent years, which analysts fear may hurt domestic growth.
(Read more: China debt: The biggest 'known, unknown' in 2014?)
Shanghai rises 0.9%
China's benchmark stock index ended at its highest levels in over a week as strong gains in financials overshadowed fears of strained liquidity.
Five firms have been approved to list on mainland exchanges next year, which ends a year-long freeze on initial public offerings. Analysts say that a glut of new listings could weigh on liquidity and hurt stocks next year.
(Read more: Four big challenges for Asia in 2014: HSBC)
Sydney down 0.1%
Australia's benchmark S&P ASX 200 ended little changed as markets observed a shortened session for New Year's Eve.
Gold miners dragged on the index as bullion prices headed for their biggest annual loss in 23 years. Medusa Mining lost 2.8 percent while Newcrest Mining eased 1.9 percent.
(Read more: Platinum may be a bright spot in 2014)
"Looking at the ASX 200 more broadly, the top five winners came from retail and service providers, while every loser except one in the top ten is involved in mining," pointed out Evan Lucas, market strategist at IG in a note.
India gains 0.13%
Indian shares gained on strong foreign buying. Apollo Tyres rose as much as 4 percent after a deal to acquire U.S.-based Cooper Tire and Rubber fell through on Monday.
How Asian markets did in 2013
Japan's Nikkei finished the year with its best gains for over 40 years, up 57 percent, thanks to Prime Minister Shinzo Abe's economic overhaul and the central bank's monetary stimulus.
(Read more: This Asian market laggard could shine in 2014)
Australian stocks posted a 15 percent gain for 2013, its biggest annual gain in 4 years, making it the second best-performing major market after the Nikkei.
— By CNBC.com's Nyshka Chandran. Follow her on Twitter @NyshkaCNBC